Australia fines Samsung A$14 million over misleading claims

The order comes after Samsung Australia admitted to misleading consumers about the water-resistance of some of its Galaxy-branded mobile phones

A visitor tests the waterproof S7 from Samsung at the 2016 IFA consumer electronics trade fair on August 3, 2016 in Berlin, Germany. | Photo Credit: Getty Images

An Australian court ordered Samsung’s local unit to pay A$14 million in penalties for misleading claims about water resistance feature in various Galaxy phones sold in the country, Australia’s competition regulator said on Thursday.

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The order comes after Samsung Australia admitted to misleading consumers about the water-resistance of some of its Galaxy-branded mobile phones, through a marketing campaign conducted between March 2016 and October 2018, the Australian Competition and Consumer Commission (ACCC) noted.

In 2019, the ACCC started proceedings against Samsung Australia in the Federal Court for deceptive representations in advertising the water-resistance of Galaxy phones such as S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus and Note 8. According to the regulator, there were more than 3.1 million of these Galaxy phones sold in Australia.

“We reviewed hundreds of complaints from consumers who reported they experienced issues with their Galaxy phones after it was exposed to water and, in many cases, they reported their Galaxy phone stopped working entirely,” ACCC Chair Gina Cass-Gottlieb, said in a statement.

Samsung Australia has acknowledged that if the Galaxy phones were submerged in a pool or sea water there was a possibility the charging port would become corroded and stop working if the phone was charged while still wet. This is not an issue in its newer, current models, the company said in a statement.

According to ACCC, Samsung was already working to mitigate the effects of this charging port corrosion, prior to the launch of the Galaxy phones.

“Samsung Australia’s ads promoting its Galaxy phones featured people using their phones in pools and sea water, despite the fact that this could ultimately result in significant damage to the phone,” Ms Cass-Gottlieb noted. “This penalty is a strong reminder to businesses that all product claims must be substantiated.”

The regulator said consumers who purchased one of the relevant Galaxy phones and experienced damage to the charging port may contact Samsung Australia.